Major League Baseball (MLB) has signed an official partnership agreement with Polymarket and a Memorandum of Understanding (MOU) with the Commodity Futures Trading Commission (CFTC) in a groundbreaking deal.
Officials said the latter agreement aims to strengthen market integrity and guard against fraud and manipulation as regulators increase scrutiny of event-based contracts, particularly around sporting contests.
Polymarket partnership allows MLB to shape laws
As part of the contract, Polymarket will be able to use MLB marks and logos on its platform, while the league will have more influence on how the rules around sports event contracts are set. This includes an integrity framework, established by both Polymarket and the MLB.
Billions are expected to be traded on the MLB throughout the upcoming season, leaving it a prime target for potential match manipulation. Last year, prediction market trading exceeded $60 billion, with over 80% generated from sports.
MLB commissioner Rob Manfred said of the partnership: “I hope that it goes without saying that our primary concern, always first in our minds, is protecting the integrity of the game. I think in today’s world, it is really important not to be chasing developments but to try to be involved and in front of those developments because our world is so fast moving.”
The MLB has had to deal with several betting scandals of late. Last November, Cleveland Guardians pitchers Emmanuel Clase and Luis L. Ortiz pleaded not guilty to federal charges tied to an alleged betting scheme involving manipulated pitches.
That case led the league to announce an agreement with sportsbooks to implement a nationwide $200 betting limit on certain prop bets and banned them from inclusion in parlays.
At the time, Manfred said: “I think that the most important undertaking and really the bedrock of our relationship with the sportsbooks is the ability to monitor betting activity. The ability to discern inappropriate patterns is really, really important. We understood the prop bet issue from the very beginning. I’m glad we’ve done something about it. But the rest of the program, right now, I think we’re generally prepared to move forward under the rules that we have now.”
MLB and CFTC Memorandum of Understanding to help league protect integrity
U.S. regulators and the MLB have agreed to share information to monitor prediction market platforms for signs of insider trading and manipulation, a move tied to those recent sports betting scandals.
Under the agreement, the CFTC will weigh the league’s input on which event-based contracts may pose heightened integrity risks. Those products, often resembling traditional sports bets, are offered on platforms such as Polymarket, Kalshi, and by major operators expanding into the space.
Officials say the collaboration is designed to improve oversight of a fast-growing segment that operates largely outside state-regulated sports betting systems. Concerns have mounted that gaps in supervision could expose markets to abuse or undermine confidence in game outcomes.
The memorandum does not impose binding requirements on either party, but signals a coordinated approach to addressing risks tied to prediction markets. It marks an initial step toward bringing greater scrutiny to an emerging sector that has drawn increasing attention from regulators and industry stakeholders.
CFTC chairman, Michael Selig, said on the signing of the deal: “The MOU is a collaborative step towards promoting the integrity and resilience of the prediction markets relating to professional baseball. Through this MOU, the CFTC is well-positioned to add additional tools to protect these markets and its participants from fraud, manipulation, and other abuses. I thank MLB and Commissioner Rob Manfred for partnering with the CFTC and taking a leading role in protecting the integrity of these growing markets.”
Prediction market companies respond to Arizona criminal case
The partnership comes at a period of maximum sensitivity between the sector and state governments around the country. Earlier this week, Arizona became the first state to level criminal charges against a prediction market company in Kalshi.
Arizona Attorney General Kris Mayes accused the company of operating an illegal gambling business and allowing bets on elections in violation of state law. The case marks the first time a state has pursued criminal action against the firm. In a press release announcing the charges, she said: “Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law. No company gets to decide for itself which laws to follow.”
Prosecutors filed a 20-count misdemeanor complaint in Maricopa County, alleging the company ran an unlicensed wagering operation and facilitated bets on Arizona elections. The charges target the company itself, not individual executives.
Officials cited examples of contracts offered on the platform, including wagers on the 2028 presidential race, Arizona statewide elections and even novelty outcomes such as whether Elon Musk would attend the Super Bowl. Authorities said some offerings extended beyond Arizona to federal elections and out-of-state sports events.
Kalshi rejected the allegations, calling the case flawed and arguing it operates under federal oversight as a regulated exchange. The company recently won a federal appeals court ruling limiting the authority of the CFTC to block election-based contracts, and has sued Arizona in federal court.
The dispute sets up a broader clash between state and federal authority, as multiple states restrict election-related wagering while prediction markets expand. Arizona joins others that have challenged the company, though it is the first to bring criminal charges instead of civil actions or cease-and-desist orders.
